Rolling into Monday with a VERY RARE 12 MO Oversold

The launch of Stocklabs brought with it an array of big upgrades, one of which included our mean reversion algorithms. We can now backtest and apply our technical algos decades into the past, providing users with greater insights into the stress points of the market.

Today we are flagging oversold on our 12 mo algo, which is rare. It does not mean we are assured to trade higher, because conditions are always different and things could be different this time — but it speaks to the way humans have behaved in the past during such a stress point and it has been good for stocks. We are tech OS, not hybrid and that’s worth noting because the hybrid includes fundamentals and tends to be a much more severe and reliable OS signal.

As for me, heavily long uranium stocks, leveraged long and +200bps pre-market. I am likely to fade the open, regroup, and then revisit around noon in a small way and finally and lastly prep for tomorrow’s open. If you’re up 2% for the day and want more — you are being greedy. If, like so many of the users inside SL, are up 8% or 10% in any given day — you are too concentrated and taking on too much risk. Let me remind you once again, the stress of being heavily concentrated isn’t worth the money and you’re bound to get blown up once you get cold and/or the market tricks you into a severe drawdown. We all have them, so don’t think you’re immune.

Since the momo train ended in late February, trading in small caps names has been a challenge. If you only kept mega capped Tech you did well. But if you were looking for outsized returns, the type of gains we saw in 2019 and 2020, you tried over and over with small cap and got your head blown off. There have been only a few weeks of uninterrupted rallies and this is not new. As a matter of fact, small caps rarely outperform large and the fact we enjoyed it during 2019-2020 is something we should be grateful for and keep them safe in our memories for if ever the occasion should come around again.

Although I try to recapture former small capped glory almost each and every day, the truth is in the pudding. It has been a waste of time and I am better off narrowing my trading to much bigger companies, perhaps even shelve day trading in favor of swing.

Here are some interesting stats for you to digest on this lovely Sunday evening. The IWM hourly returns over the past month, courtesy of Stocklabs. The data for the entire year is similar. Fade the opens and do not ride heavily long into the close.

I can say with certainty, selling pre-market is even better than selling on the opening tick. Almost always do we see fades at 9:30am, followed by an afternoon bump from 10-1, followed by another dump. Crypto derivative stocks in particular get faded, no matter what BTC-ETH are doing. It is a poor market for momentum, but perfectly fine if you’re diverse and have longer term holding periods.

I’ve blogged about 9/11 countless times over the years and of course it was a tragedy and of course the men and women who died serving the nation afterwards are solemnly remembered and honored. But that this stage of America’s downward spiral, I view 9/11 as the day it started to accelerate downwards, taking away everything we hold true.

Since 9/11:

American government via media programmed people to hate Muslims and wage war, calling the deaths of civilians “collateral damage”.

We have ceded our rights to the government via the Patriot Act and now with smart phones and advanced tech, we are more or less monitored 24/7.

The wars continue! Somehow, someway, the attacks of 9/11, where the passports of the attackers by an act of God fell from the plane and onto the streets below just in time for the evening news to identify, and the miraculous demolition of building #7 and Top Gun tier expertly piloted plane into the Pentagon that produced zero airplane parts has all led to yet another year of fake patriotism and bullshit Twitter posts and more neocon fuckery that always entails our bullshit democracy and how this corporate biofascist state should be exported overseas so that our sons and daughters should bleed for it.

I am very sorry to be glib about this — but fuck 9/11.

Are you having fun yet?

I went to pick up ANTIFA FLY from the school yard today and left +2.2%, a genteel and fine offering. I felt good about the stock market because it had looked good and everyone inside Stocklabs was making money — talking with their mouths full — day drinking in the sun but not drunk, just imbibed enough to drive into the sun and parlay over on the side of the road with a fishing pole to catch tonight’s supper.

Lo and behold, tragic events awaited me, once again, and I came back to an account down 50bps from the peak and then I got stubborn and bought more and then the market went lower again and again and again — ending the session off by 132 NASDAQs. It was the sort of day where buyers evaporated into dust and nothing but sellers, a steady drip of them, led the market lower by its nose, slow and easy — simmering almost. By 4pm I was done, up only 67bps on a day when I was supposed to gain 3%.

For the week I was RACKED for 5.5% and I close out this week entirely long and in fact on some margin. I am supremely confident we bounce very hard on Monday — because the spirit and the mood of the country is grand and joyous. We are building back better and united, more united than ever, and the spirit of Jefferson courses through our veins in our fight against COVID and all of the many 80 years old and morbidly obese good people who are dropping dead because of it.

Personally, I cannot wait to get vaxxed and then in about 5 months boosted so that I too can cavort again in NYC, like when I was a younger man, and gain access to privileges, such as eateries and perhaps a Broadway show, maybe even a cocked tail. From my vantage point, as a nation, we cannot allow the unvaccinated go unchecked and live amongst themselves spreading viruses to those of us who are FULLY MEDICATED. I propose, if I might be so bold, to send cops into minority areas and force them to inject the medicine into their bodies. I say this, not to be racist or anything like this, but I find it so annoying that 75% of black folks do not want the vaccine and have not taken it. This, as you know, cannot stand, and we should restrict these people from flight, access to healthcare, and all of the many privileges responsible people in America are afforded, thanks to Dr. Fauci, Bill Gates and everyone else at the NIH and BIG PHARMA for making us safe again!

Amidst the array of stocks I bought yesterday, mixed in with the rest, was AFRM. They reported earnings and smashed the shorts faces to pieces. Because of that and the opening bump, I sold all and am +2.1% for the session. I am 90% cash now and EXTREMELY hesitant to get back in — because for one I have been trading poorly and two the market looks like absolute shit.

Can it turn around?

Maybe. But for now the small caps are getting nothing but knives to the face and the big caps are led up by commodity related names. This isn’t exactly an accommodative tape, not to mention the crypto markets are being sacked.

We have many things to discuss and I am sure what everyone wants to discuss is the vaccine and who stands to benefit. Obviously the big winners are MRNA and BNTX — but there are others likely to play too — such as NVAX and VIR. There is bound to be more and I am certain the world is looking forward to more drugs and methods of control in order to feeeeeeeeeeel safer and make us all privy to fine things like travel (OMG!) and yummy exotic foods in far away and distant countries. We all just cannot wait to consume and travel by cruise ships, packed tightly amongst one another — fully vaccinated and boosted and masked — because endemics are fun and also profitable to trade.

On a much more somber note, COVID deaths and cases are up triple digits YOY. There is no way in hell our hospitals can withstand this many patients during peak flu season, so buckle up and get ready for renewed lock downs.

Jim Biden is going to mandate all companies with more than 100 employees to vax the fuck up. Moreover, and this goes without saying, it’s only a matter of time before travel is not possible for the unvaccinated swine. No matter the facts regarding vaccines and the lucky ones who get to die from it, especially in age brackets that COVID poses little to no risk. If you send your children to die at the altar of the vaccine, find solace in knowing you did your civic duty and protected some 80 year old fat fucking slob from dropping dead.

Do not solely blame Biden, as this appears to be a global coordinated event — to fight a virus that was created at UNC with NIH funding and released into the world on purpose for reasons one could only imagine.

Does the vaccine stop the virus or protect you from death? No — but it does not matter — does it? If you don’t like it and choose to not vaccinate — no problem. You just can’t work, travel, or eat outside.

I’m in a salty mood because my trading has sucked. It does not help to get rug pulled by the market. I am down 6% for the week and it doesn’t look good for tomorrow. I closed the session LEVERAGED LONG and hating life.

In brighter news, I am still improving upon Stocklabs an creating great tools for traders. While I struggle and work on getting my shit together, perhaps you can make use of what ‘we’re building. Here is our latest offering.

I cannot even describe how mad I am at this tape, my misfortune, my bold and effervescent stupidity. I am leveraged long into what seems like a very good tape, enjoying modest gains of 1.55% and the FED’S BOWMAN steps in with some comments and we candle the fuck down and I get dicked out.

I traded merrily. I had fun doing it. I was almost feeling good about myself. And then BAM — the fucking wheels fell of and my chuck wagon careened off the dirt road over some rocks and now I am descending lower into a valley of nothing — my assured death.

I’ve sold nothing. I’ve actually added to my positions. I am now about flat to down a bit. I am too angered to look at my account. I am livid and depressed and I am not having fun anymore.

On the brighter note, NFTs are doing very well. Why, just today someone told me of their Vampire drawings that fetched 53x his cost basis in only 1 day!

I got off several very good trades this morning and then gandered at the market and liked what I saw, so I went all in — leveraged to 140%. This normally is a stupid thing to do especially when trying to crawl out from a hole. But given the oversold nature of the tape an the fact that we have some momentum today, I opted to attempt to capture some gains back, not by surgical methods, but carpet bombing in an attempt to grab alpha.

As I write this, the market just dropped 20bps and my gains CUT IN HALF from +1.5% to 0.8%. Nevertheless, this is my position at the present time. I own a who’s who of “good stocks” and will cut loose losses rapidly, although I will be a little more forgiving now that I own every stock on the market.

I got tired of tick trading, so the other option was leveraged bet and here I am.

Stocklabs was OVERSOLD yesterday for our 6 month algo, and almost for our 12. My best bet is to be long into this condition, in the hopes and dreams that we can recapture some upside momo.

Up until today, my poor trading was only lack of gains — disparate returns amidst overall ebullience resulting in frustration. Today the chickens came home to roost, as I was dispatched to the tune of 4.3%. Such a set back places me down 5.5% for September and we’re just getting started. I can no longer take outsized risks and must protect the account from any further downside, while at the same time perform.

The overall tape was poor and trading stocks were discarded for waste. There are baskets I track inside SL and they were all down 3 to 4% for the session.

At the same time, bonds were up and defensive stocks green. Anything paying a dividend and consumer based was up. As such, I ended my trading session by clearing the decks and buying defensive stocks for tomorrow’s opening tick. I was conflicted by it — because we are oversold. There is a distinct chance we run tomorrow in a little mean reversion pin action. However in the off chance this does not come to pass, I believe we are now in a defensive posture, 62% cash.

What an utterly useless avocation this now is — me coming here to discuss failures. It’s over for me. I had many good runs and valiant efforts. I was a solid trader through and through and loved doing it. But today’s sojourn into disaster is the straw that broke my back, me being the camel and all.

DOWN 425BPS and I do not even know why. Markets aren’t that bad. I wasn’t even fully invested. The only reasonable explanation is that I am cursed, haunted by devils who are shorting my stocks to malign me.

This is unacceptable, so therefore, I have HALTED my trading account and do not know when I will revisit it. Frankly, I do not deserve to trade. I should be washing dishes or perhaps cooking bread like a fat fuck.

Trading was fun and many of you benefitted from my wisdom; but now it’s over.

Ciao